Real Estate & Property Law

Seventh Circuit: Threat Of Eminent Domain No "Sword Of Damocles," So Declaratory Judgment Suit Premature

By Robert Thomas (inversecondemnation.com)

We all live under the threat the government may exercise eminent domain and take our property, and must live with that cloud, unless the threat becomes more concrete. Only then can we run to court to complain about it. While the U.S. Court of Appeals for the Seventh Circuit didn't expressly hold so, that idea underlay its decision in Rock Energy Cooperative v. Village of Rockton, No. 10-1106 (Aug. 10, 2010) (sounds like something out of "The Flintstones," no?).

In that case, Rock Energy sought a declaratory judgment from the federal district court that the Village does not have the authority to purchase or condemn its property. We leave the details for you to review, but here is the most interesting part of the decision in our view:

We begin with Rock Energy?s eminent-domain theory. The company would like us to believe that its Alliant assets are likely to be taken by the Village at any moment. As we held in Shannon, it continues, it is "no bar to ripeness if the government has only threatened enforcement, rather than actually brought a lawsuit." 539 F.3d at 760. But this record is startlingly devoid of evidence that the Village is waiting to pounce with an eminent domain action. The ordinance about which Rock Energy complains was passed five years ago; Rock Energy has had a contractual right to own the assets for the same five years; and it has actually held them for more than three years. That does not sound like imminence to us. What Rock Energy does not like is living, as it might put it, under the Sword of Damocles, knowing that its property rights can be cut off by the Village?s eminent domain power at any moment

This case does not look like some of the other Illinois cases on which Rock Energy relies, where the unrealized threat of eminent domain was well on the road to fulfillment. For example, in Davis v. Brown, 827 N.E.2d 508 (Ill. App. Ct. 2005), the state authorities had an elaborate plan in place to take the plaintiffs? property, and the ordinance in question restricted their use of the property during the lead-up to the taking. Id. at 511-13. In Philip v. Daley, 790 N.E.2d 961 (Ill. App. Ct. 2003), the city was in the midst of executing a detailed plan to take the plaintiffs? property. Id. at 963-64. As far as this record shows, during the years since the ordinance was passed, the Village has done nothing other than write a letter or two indicating that condemnation was on the table.

Slip op. at 7-8.

Full post as published by inversecondemnation on August 23, 2010 (boomark / email).